03/08/2019 01:30 PM House FINANCE

HOUSE BILL NO. 54                                                                                                             
                                                                                                                                
     "An    Act    making    supplemental    appropriations,                                                                    
     reappropriations,  and  other appropriations;  amending                                                                    
     appropriations; capitalizing  funds; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
2:53:45 PM                                                                                                                    
                                                                                                                                
LACEY  SANDERS, BUDGET  DIRECTOR, OFFICE  OF MANAGEMENT  AND                                                                    
BUDGET, addressed the  supplemental request legislation that                                                                    
fell outside of  the disaster need. The  bills were separate                                                                    
in anticipation of needing to  move the disaster legislation                                                                    
more quickly. She provided  a PowerPoint presentation titled                                                                    
"HB  54   -  FY2019   Capital  and   Operating  Supplemental                                                                    
Overview" dated March  8, 2019 (copy on file).  She began on                                                                    
slide 3  and reviewed  items covered  by the  bill including                                                                    
reductions in spending,  formula program adjustments, salary                                                                    
adjustments  related   to  the  classification   of  trooper                                                                    
positions,  operating  adjustments,  capital  projects,  and                                                                    
several transfers back  to the General Fund.  The total bill                                                                    
was  $110.4  million, made  up  of  $92 million  in  federal                                                                    
funding,  $17.7  million  in other  funds,  and  $51,800  in                                                                    
general funds.                                                                                                                  
                                                                                                                                
Ms.   Sanders   provided    a   historical   comparison   of                                                                    
supplemental  appropriations (excluding  disasters) from  FY                                                                    
14 to  FY 19.  She noted  that supplemental  requests varied                                                                    
from  year-to-year   and  explained  that  costs   could  be                                                                    
unpredictable.                                                                                                                  
                                                                                                                                
2:55:51 PM                                                                                                                    
                                                                                                                                
Ms.  Sanders  referenced  a   spreadsheet  outlining  FY  19                                                                    
supplemental   requests  ["HB   54  -   FY2019  Supplemental                                                                    
Requests"  released January  28, 2019  (copy on  file)]. She                                                                    
noted  she had  briefly reviewed  the items  during a  House                                                                    
informational  meeting in  the past.  She offered  to review                                                                    
the items or take questions.                                                                                                    
                                                                                                                                
Vice-Chair Johnston  looked at  item 16 related  to Medicaid                                                                    
funding. She remarked that in  the past, large supplementals                                                                    
could be driven  by underfunding Medicaid. She  asked if the                                                                    
proposed amount would be sufficient.                                                                                            
                                                                                                                                
Ms. Sanders replied that OMB  had worked frequently over the                                                                    
past  several  months  with the  Department  of  Health  and                                                                    
Social Services  (DHSS) to  identify what  the need  was and                                                                    
should be.  She reported that  OMB believed the  funding was                                                                    
sufficient to meet Medicaid claims  through the remainder of                                                                    
the fiscal year.                                                                                                                
                                                                                                                                
Vice-Chair Ortiz asked  how the majority of  the $15 million                                                                    
[in  Medicaid   funds]  was   dispersed.  He   wondered  who                                                                    
benefitted from the funds.                                                                                                      
                                                                                                                                
Ms. Sanders  answered that  she was  not a  Medicaid expert,                                                                    
but  it  was  her   understanding  the  funds  went  towards                                                                    
payments  due  to  Medicaid  providers.  She  clarified  the                                                                    
funding was  to get through  the end  of the fiscal  year to                                                                    
reimburse  providers  for  costs  incurred  in  the  current                                                                    
fiscal year and not to end  payments and shift them into the                                                                    
next fiscal year.                                                                                                               
                                                                                                                                
2:58:00 PM                                                                                                                    
                                                                                                                                
Representative  Josephson  looked  at item  18  [related  to                                                                    
Village Public  Safety Officer (VPSO) program]  and asked if                                                                    
the reduction was  due to the inability to  hire [VPSOs] and                                                                    
spend the money.                                                                                                                
                                                                                                                                
Ms.  Sanders  clarified  the   reduction  would  align  VPSO                                                                    
program funding.  It was the  administration's understanding                                                                    
that grantees receiving  the funding were not  able to fully                                                                    
use the  funds on an  annual basis due  in some part  to the                                                                    
inability to fully fill the VPSO positions.                                                                                     
                                                                                                                                
Co-Chair Foster  stated that the prior  year the legislature                                                                    
had  included   language  in   the  operating   budget  that                                                                    
specified any excess funds would  go towards recruitment and                                                                    
retention of  VPSOs. He asked  if any efforts had  been made                                                                    
to increase recruitment and retention of VPSOs.                                                                                 
                                                                                                                                
Ms.   Sanders  recalled   through  conversations   with  the                                                                    
Department of Public Safety that  the department was working                                                                    
on the  issue. She  would follow up  with the  department to                                                                    
learn what efforts had been made.                                                                                               
                                                                                                                                
Representative Carpenter asked about  a $5 million reduction                                                                    
from  the  Alaska  Gasline  Development  Corporation  (AGDC)                                                                    
[item 27, page 2].                                                                                                              
                                                                                                                                
Ms.  Sanders   responded  that  when  OMB   was  working  on                                                                    
supplementals  it  had  asked  each  agency  to  review  the                                                                    
funding they  had been  allocated for  the current  year and                                                                    
the funding they  had available in funds.  She detailed that                                                                    
AGDC contributed  $5 million back  to the General  Fund; the                                                                    
funds were in excess of what  AGDC needed to get through the                                                                    
end of the  fiscal year. The agency was working  on what its                                                                    
plan  moving  forward  would  be.  She  clarified  that  the                                                                    
reduction did  not mean  the agency would  not come  back to                                                                    
the  legislature for  funding in  the future  once it  had a                                                                    
developed plan.                                                                                                                 
                                                                                                                                
Representative  Knopp  stated  that  the  [administration's]                                                                    
request  had come  in before  the Federal  Energy Regulatory                                                                    
Commission (FERC) had moved the  process back by four months                                                                    
for the  environmental impact  statement (EIS),  which would                                                                    
extend  AGDC's timeframe.  He  asked  if the  administration                                                                    
believed AGDC could get through with the remaining funds.                                                                       
                                                                                                                                
Ms.  Sanders responded  that it  was her  understanding that                                                                    
AGDC's  remaining funds  were sufficient  to get  the agency                                                                    
through the end of the fiscal year.                                                                                             
                                                                                                                                
Representative  Carpenter  asked  when the  money  had  been                                                                    
identified and when the administration  had been notified to                                                                    
include it on the spreadsheet.                                                                                                  
                                                                                                                                
Ms.  Sanders  answered  that   supplementals  had  been  put                                                                    
forward  on January  28.  She  shared that  if  there was  a                                                                    
concern,  AGDC would  reach out  to OMB;  she had  not heard                                                                    
anything from the agency.                                                                                                       
                                                                                                                                
3:01:53 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Ortiz  pointed  to  item  12  -  a  $20  million                                                                    
reduction to DEED  [for the repeal of one-time  state aid to                                                                    
school districts for FY 19].  He referenced discussion in an                                                                    
informational  hearing about  the distribution  of funds  to                                                                    
the district. He recalled hearing  the distribution would be                                                                    
made  as soon  as  some  type of  action  was  taken by  the                                                                    
legislature.                                                                                                                    
                                                                                                                                
Ms. Sanders  replied in the  affirmative. She  detailed that                                                                    
the  funding would  be distributed  if the  legislature took                                                                    
action  and  the requested  repeal  proposal  was not  moved                                                                    
forward.                                                                                                                        
                                                                                                                                
Vice-Chair Ortiz  stated it was  his understanding  that the                                                                    
previous legislature had already  taken the necessary action                                                                    
for  the $20  million  to be  distributed  to districts.  He                                                                    
thought the  scenario presented was a  catch-22. He believed                                                                    
action was only necessary if  the legislature decided not to                                                                    
distribute  the money.  He asked  if  the legislature  could                                                                    
issue an  intent statement indicating  its desire  to follow                                                                    
the action taken in 2018.                                                                                                       
                                                                                                                                
Co-Chair Foster replied  that the item could be  left out of                                                                    
the  supplemental that  would ultimately  be  passed by  the                                                                    
House. Additionally,  the House could  issue a sense  of the                                                                    
House  or  the   House  and  Senate  could   issue  a  joint                                                                    
resolution to send a message of the legislature's intent.                                                                       
                                                                                                                                
Vice-Chair Ortiz  remarked that  action on  the supplemental                                                                    
would be  necessary [to  provide clarity  on the  issue]. He                                                                    
remarked  that  districts were  in  limbo  until action  was                                                                    
taken  on  the  bill.  He  asked if  there  was  action  the                                                                    
legislature  could take  outside the  supplemental to  allow                                                                    
the distribution of the funds.                                                                                                  
                                                                                                                                
Co-Chair Foster  responded that he  did not  envision taking                                                                    
months to pass the supplemental.  He estimated it may be one                                                                    
month. He noted  that if there were issues  in the meantime,                                                                    
the  committee could  talk  about the  options.  He did  not                                                                    
believe the supplemental process would be drawn out.                                                                            
                                                                                                                                
HB  54  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
Co-Chair  Foster  canceled the  9:00  a.m.  meeting for  the                                                                    
following  Monday.   He  reviewed   the  schedule   for  the                                                                    
following week.